What is a jumbo loan in California? 2025 jumbo mortgage limits and requirements

Buying a home in California can mean navigating a market where prices rise faster than national averages. In many parts of the state, the amount you need to borrow to purchase a home may exceed the limits of conforming conventional loans. When that happens, a jumbo loan comes into play. These loans are designed for higher-priced homes and have become an essential tool for buyers across California, not just those purchasing luxury properties.

Let’s walk through what a jumbo loan is in California, the 2025 jumbo loan limit and requirements, and whether it may be the right type of mortgage for you.

What is a jumbo loan in California?

A jumbo loan is a mortgage that goes beyond the conforming loan limits set each year by the Federal Housing Finance Agency (FHFA). For 2025, that limit starts at $806,500 for a one-unit residential home in many California counties, and rises higher in designated high-cost areas like Alameda County and Contra Costa County. Any mortgage above your county’s limit is considered a jumbo loan in California, which means it falls outside the size eligible for purchase by Fannie Mae or Freddie Mac.

These loans exist to support buyers in markets where home prices stretch beyond national lending caps – whether that’s a higher-end property, a home in a competitive coastal area, or a neighborhood where values have steadily increased. A jumbo loan gives California buyers access to financing that can match the cost of housing in these areas, instead of being limited by conforming loan thresholds.

Lenders look for a stronger credit history, detailed income documentation, and a financial profile that comfortably supports a larger payment that buyers typically take on with a jumbo mortgage. We’ll break these requirements down more in the sections ahead.

Jumbo loan limit in California (2025)

For 2025, the jumbo loan limits in California are:

• $806,500 in most California counties
• Up to $1,209,750 in federally designated high-cost counties

Because loan limits vary by county, whether you’ll need a jumbo loan depends on where you’re buying and your county’s conforming loan limit for the year.

While many counties in California follow the $806,500 baseline, several others fall into midrange tiers before reaching the FHFA’s high-cost ceiling of $1,209,750. These different thresholds reflect how dramatically home prices shift across California, from inland areas with more moderate pricing to coastal and metro regions where home values are much higher.

With the statewide median home price sitting above $800,000 and many markets regularly surpassing the $1 million mark, it’s common for California buyers to approach or exceed their county’s conforming limit, unless they’re prepared to make a substantial down payment. As a result, jumbo loans have become a common financing tool for buyers in much of the state – not just for luxury homes but also for midrange properties in competitive markets.

In these situations, options like the Rocket Mortgage® Jumbo Smart Loan, which offers financing up to $3 million, can provide the flexibility to stay competitive in higher-priced markets while choosing a loan amount that supports your long-term plans.

2025 FHFA conforming loan limits by county in California

Requirements for a jumbo loan

Although jumbo and conventional loans follow a similar application process, qualifying for a jumbo mortgage usually requires meeting more rigorous standards. Instead of automated underwriting, your file will go through manual underwriting, giving the lender a closer look at your credit, income, savings, and overall financial stability.

Property type

Jumbo financing is available across a range of properties, including primary residences, second homes, and investment properties. Requirements may adjust based on occupancy or complexity, but borrowers typically have flexibility in the types of homes they can finance at higher price points.

Credit

A strong credit history is an important part of qualifying for a jumbo loan in California. Many programs start with a minimum credit score around 680, though some lenders set a higher requirement, especially for larger loan amounts. VA and FHA jumbo options can allow lower scores, but most borrowers using jumbo financing will need stronger credit scores.

Down payment

The amount required usually falls between at least 10% and 20% of the purchase price, depending on the loan amount, property type, and overall borrower strength. Some programs may offer lower down payment options for highly qualified applicants or those eligible for a VA or FHA jumbo loan, but lenders generally expect meaningful equity contributions at this level of financing.

Debt-to-income (DTI) ratio

Lenders usually look for a DTI ratio under 43%, which usually includes your new mortgage payment. Because jumbo loans come with larger monthly obligations, this ratio helps lenders understand how comfortably your income supports the added payment.

Steady income

Because you’re taking on an even higher loan amount with a jumbo loan, having a steady income is important. That may mean a consistent salary, predictable commission history, or strong self-employment earnings. Lenders may require additional documentation during the underwriting process to verify your income.

Cash reserves

Jumbo loans often require a deeper financial cushion, with reserve requirements commonly reaching 12 months of mortgage payments. Lenders usually accept a combination of liquid assets, retirement funds, and other eligible accounts to meet these requirements.

For borrowers exploring Rocket Mortgage’s Jumbo Smart Loan, the minimum reserve amount increases based on the size of the loan you plan to take:

Pros and cons of buying a home in California with a jumbo loan

Pros

• Competitive rates: In today’s market, well-qualified borrowers often see jumbo mortgage rates that are comparable to – and sometimes even lower than – conforming loan mortgage rates. Strong credit, income stability, and solid reserves could help you access the most competitive pricing.
• No private mortgage insurance (PMI): Many jumbo programs don’t require PMI, even when your down payment is below 20%. That can mean lower monthly payments compared with a smaller conforming loan that requires mortgage insurance.
• Flexible loan options: Jumbo financing is available in a range of structures, including fixed-rate and adjustable-rate options, as well as financing for primary homes, second homes, and investment properties. This gives you room to choose the terms that best align with your long-term plans.

Cons

• More detailed qualification standards: Lenders review your finances with additional care for a jumbo loan. This deeper look isn’t meant to be discouraging, but it does mean that borrowers with recent credit challenges or higher monthly obligations may need more time to strengthen their profile before qualifying.
• Higher down payment expectations: Because jumbo loans often require a higher percentage down, the actual dollar amount can be significant. For example, a 15% down payment on a $1.2 million home is $180,000.
• Greater reserve requirements: As mentioned earlier, many jumbo programs ask borrowers to keep a year’s worth of mortgage payments in reserves. On a higher loan amount, that cushion can be substantial. While reserves can come from a combination of assets, having that amount set aside may require more intentional planning.

Is a jumbo loan right for me?

If you’re a home buyer in California, a jumbo loan can be a good fit when the home you’re buying exceeds your county’s conforming limit. However, it’s worth stepping back to look at the full picture. Beyond qualification requirements, several factors can help you determine whether a jumbo mortgage aligns with both your immediate needs and long-term plans.

• Your comfort with higher responsibility: A jumbo loan is a larger financial commitment. Even if you qualify on paper, it’s important to choose a loan amount that feels sustainable. The right mortgage should enhance your life, not restrict it.
• Interest rates: Jumbo loan rates can be competitive – sometimes even lower than conforming rates for strong borrowers. Still, it’s important to compare how different rates and loan structures affect your monthly payment and total cost of borrowing over time.
• Closing costs: You can still expect to pay 3% – 6% of the home’s purchase price, but because of the larger loan amount, total closing costs are generally higher.
• Tax implications: Interest deductions may work differently as loan amounts increase, especially if you plan to itemize. Speaking with a tax professional can help you understand how a jumbo mortgage may influence your annual tax strategy and long-term financial planning.

The bottom line: A jumbo loan could be the right option for you

A jumbo loan can be the right option for many home buyers in California, where housing costs often rise well above national averages and many properties exceed local conforming limits. While these loans come with higher financial expectations, they also provide the borrowing power and flexibility needed to compete in the state’s high-cost and fast-moving markets.

When paired with steady income, thoughtful planning, and the right loan structure, jumbo financing can help you move forward with confidence and purchase a home that aligns with both your budget and your long-term goals. If you’re ready to get started, you can apply for the Jumbo Smart loan today. 

Refinancing may increase finance charges over the life of the loan.